Gordon Brown to discuss credit crunch with Wall Street bank bosses

16 April 2008 / by Rebecca Sargent

Gordon Brown is set to meet with Wall Street bank bosses today to discuss ways of reducing the impact of the credit crisis in the UK.

The Prime Minister is expected to urge Wall Street bank bosses to reveal any losses much earlier in order to reduce the damage done and control potential disasters.

Gordon Brown has come under criticism for the way the Government has handled the credit crisis in the UK so far. The current financial turmoil being experienced In the UK began in the US as a result of sub-prime lending, it is thought the Prime Minister will discuss ways of averting further damage in the UK by looking at what happened in the US.

In an interview with the BBC yesterday, shortly before leaving for America, Mr Brown said: "We recognise that there are more things that can be done, to make sure that the effects of what happened in America will not have such a major impact here."

The US meeting comes after yesterday's Downing Street summit where around 25 executives from Britain’s high street lenders, insurance companies, hedge funds and investment banks met to discuss the state of the UK’s economy.

The mortgage market has, so far, been the worst affected by the credit crisis in the UK; consequently yesterday's meeting focused on ways to ease the lack of liquidity in the mortgage markets.

Smaller building societies warned they could be forced to stop offering new mortgages unless action is taken to alleviate the financial pressures.

The Bank of England has taken action by injecting a further £15 billion into the banking system in an attempt to improve liquidity in the UK’s economy. Speaking yesterday, Gordon Brown said: "We have to show people who are worried about their homes and people who are worried about their mortgages and people who are worried about their jobs that we can insure that the economy is safe for them over these next few months, and that is why we are engaging in further discussions with banks and building societies on a wide range of measures to bring greater confidence to the housing market."

"The credit crunch has affected the willingness of banks to lend, and we can do more about that." he said.